Takata Files for Bankruptcy Following Airbag Scandal
June 26, 2017—With spiraling debts estimated at more than $9 billion, Takata said it's seeking bankruptcy protection in Japan and the U.S., according to CNN.
The company's stock plunged more than 65 percent last week following reports that its bankruptcy filing was imminent. Its shares were suspended Monday because they're going to be delisted, the Tokyo Stock Exchange said. Only 35 percent of affected cars have so far had their inflators replaced. The process of making all U.S. vehicles safe again could last until 2023.
The major automakers who used Takata airbags in their cars—including Honda, Toyota and GM—could also end up out of pocket. They're likely to have to pick up the tab for most of the estimated $5 billion that's needed to pay for replacing the tens of millions of Takata airbag inflators still in people's vehicles around the world.
Key Safety Systems, a Chinese-owned company based in Michigan, is paying $1.6 billion for nearly all of Takata's operations. But it's staying away from the parts that deal with the airbag inflators, which will eventually be wound down.
"We caused troubles for our supporters, those who cooperated with us and the creditors," Chairman Shigehisa Takada said at a news conference Monday where he bowed before the cameras. "On behalf of Takata, I apologize deeply from the bottom of my heart."
Earlier this year, Takata admitted to manipulating and withholding key information about the faulty inflators for years, even after they started exploding in people's cars. It pleaded guilty in the U.S. to a criminal charge of wire fraud for which it will have to pay $1 billion, including a $125 million fund to compensate victims and their families.
The money from the sale of the business to Key Safety Systems will be used to cover those and other costs resulting from the airbag recall.